It is understandably very important to insurers to ensure that claims progress and files are closed. Most insurers have files in which the plaintiffs and their counsel have simply stopped moving the file forward. In British Columbia, it has always been difficult to succeed in an application for want of prosecution; unfortunately, as a result of two recent decisions, it has become even more difficult.
An Application for Want of Prosecution
The British Columbia Supreme Court Rules allow for an action to be dismissed for want of prosecution. Rule 22-7(7) provides:
If, on application by a party, it appears to the court that there is want of prosecution in a proceeding, the court may order that the proceeding be dismissed.
The cases provide that the following factors should be considered in deciding whether an action will be dismissed for want of prosecution:
(1) the length of the delay and whether it was inordinate;
(2) whether there is a reasonable excuse offered for the delay (such as whether the delay was intentional and tactical or whether it was the product of dilatoriness, negligence, impecuniosity, illness or some other relevant cause);
(3) whether the delay has caused serious prejudice to the defendant such that it creates a substantial risk that a fair trial is not possible; and
(4) whether, on balance, justice requires dismissal of the action.
For many years, a commonly held view was that if the plaintiff had not moved a claim forward for a few years, there was a good chance of succeeding in such an application. A delay as long as 5-7 years was often considered determinative.
However, two recent Court of Appeal cases have modified this view, and made it much more difficult to have an action dismissed for want of prosecution in British Columbia.
In PMC Builders and Developers Ltd. v. Country West Construction Ltd. (2009 BCCA 535) (“Country West”), the Court considered an application for want of prosecution on the following facts:
- The action was for a breach of contract and negligence relating to a subcontract in a construction project. It was commenced on July 2, 2004. The last step taken by the plaintiff before the application was on September 28, 2005, when the plaintiff successfully had the action transferred to a different registry.
- Approximately 3.5 years later, on January 24, 2008, the plaintiff delivered a notice of intention to proceed and a defendant immediately responded with an application to have the action dismissed for want of prosecution and to have the bond released.
- The plaintiff conceded that the delay was inordinate, and that it did not have an excuse for the delay. However, it opposed the application on the basis that there was no actual prejudice to the defendant and that the balance of justice still favoured the plaintiff.
The defendant’s assertions of prejudice, that various witnesses were unavailable, were not considered compelling by the Court of Appeal.
One rejected assertion concerned the death of a key witness. The witness had died a few years after the litigation was commenced. The Court of Appeal reasoned that the death of the witness was not prejudicial since the witness had died only a few years after the dispute arose; accordingly, his evidence would not have been available even if the plaintiff had pursued his claim diligently. (See the note below for two other examples of how the courts in British Columbia have considered the death of a key witness).
It was also arguably significant in the Country West decision that the cause of action arose in 2003, and so the limitation period of 6 years had not yet expired by the time the application for want of prosecution was heard.
In June 2012, the British Columbia Court of Appeal issued a decision in Murrin Construction Ltd. v. All-Span Engineering and Construction Ltd. (2012 BCCA 251) (“Murrin”). The Court was considering an application for want of prosecution in an action that was commenced in 2006, relating to events in 2000. No step had been taken in 2.5 years. The limitation period had long since expired.
The chambers judge found that the delay had been inordinate and inexcusable, causing serious prejudice. However, the chambers judge also reasoned that the balance of convenience nonetheless favoured the plaintiff because the defendant had not diligently pursued its counterclaim (of approximately $7,000).
The Court of Appeal affirmed the decision. The court found that the fact that there had been no actual prejudice was relevant (and arguably determinative) in assessing the balance of justice.
In discussing the presumed prejudice, the majority stated:
The judge presumed prejudice on the basis of presumed erosion of memory of possible witnesses, as he was entitled to do. However, the appellant led no evidence of specific prejudice. I think the absence of such evidence in the circumstances as I have outlined them above is an indication that no serious prejudice has been suffered. Moreover, I think the judge may have overstated the difficulty of mounting a fair trial when he said, “The nature of this contract as well as the design standards to be applied, the actual defects that allegedly manifested as well as the issues of insurance are all now likely lost in the shrouds of time.” It seems to me to be likely that there are documentary records of the applicable design standards, the alleged defects in the bridge, and the measures taken to repair them, which would encompass the central issues in the action.
As a result, the court found that the delay had not given rise to “a substantial risk that a fair trial of the issues in the litigation will not be possible”. In finding that the balance of justice favoured the plaintiff, the majority of the court determined that the failure of the defendant to pursue the counterclaim, and the fact that the plaintiff had taken positive steps to move the action forward after being notified of the application, were both relevant factors to consider.
In the minority concurring decision, Chiasson J.A. disagreed about the relevance of the counterclaim, but agreed that the lack of actual prejudice was a relevant factor in considering the balance of justice. The plaintiff’s response to notice of the application for want of prosecution was relevant. He advocated for a “last chance” for the plaintiff to move the action forward after being given notice of the application.
As a result of these two cases, the fourth factor to be considered in deciding whether an action will be dismissed for want of prosecution, “whether, on balance, justice requires dismissal of the action”, has become a more significant hurdle. In balancing justice, the court is to consider the weight that should be afforded to the first three criteria, and the additional criteria.
The recent cases indicate that the courts will consider the following to be of particular significance:
- The length of the delay, and in particular whether the limitation period has expired.
- The excuse offered by the plaintiff. A compelling excuse may tip the balance towards the plaintiff.
- Whether actual prejudice has been suffered by the defendant has been very important in recent cases. Without actual prejudice, it may be difficult to have an action dismissed.
- The conduct of the plaintiff after receiving the application for want of prosecution. If the plaintiff immediately takes steps to move the action forward, the court may grant the plaintiff a “last chance.” Thus, litigants need to carefully assess whether they are prepared to take the risk of “waking up the plaintiff” when they give notice of an application for want of prosecution.
It is interesting to compare the law in British Columbia with that in Alberta. Rule 4.33 of the Alberta Rules of Court (which comes into force on November 1, 2012) provides that if two or more years have passed since the last act to advance the action, the Court must (subject to limited exceptions) dismiss the action. Such a rule appears more consistent with the upcoming amendments to the Limitation Act in British Columbia, which reduce the limitation periods and the threshold test for discoverability (as discussed in our May 23, 2012 blog entry). The author is of the view that a similar revision in British Columbia should be welcomed by all litigants to clarify the law and thereby ensure that litigants spend less time (and money) addressing these types of issues.
It should be kept in mind that an application for want of prosecution is very fact dependent. The comments in this blog are intended to provide some insight into the law, but should not be read as precluding a successful application in a specific case.
Side Note: Relevance of the Death of a Witness in Assessing Prejudice
Two other cases since Country West have considered whether the death of a witness caused actual prejudice:
1. In McBeth-Kearns v. Marples (2012 BCSC 714) the death of a key witness during the delay period resulted in a finding of serious prejudice, but the Court considered the prejudice ameliorated because the witness had been examined for discovery, and there were documents available. As a result, Mr. Justice Joyce reasoned that the balance of justice favoured the plaintiff.
2. In Gill v. Hepburn (2012 BCSC 439) the death of the defendant himself was found to be sufficiently prejudicial. The Court noted that it was significant that the allegations against the defendant were personal in nature in coming to its conclusion. It seemed significant that this was not a case that was likely to be based on the documents available.